BeiGene Ltd., a Chinese biotech company, plans to secure $2.1 billion in a direct bid of 145.8 million shares to fund drug studies and market its vaccines in China and the US, the Nasdaq-listed group disclosed Monday.
The stock will be priced at $14.23 each, equivalent to a price of $185 per American Depository Share - 5.6 percent lower compared to its closing price on Friday. The bid is estimated to close on or around July 15 subject to customary closing conditions, BeiGene said.
The offering is being carried out without an underwriter or a placement middleman and as a result, the biotech firm will not be paying any underwriting discounts in connection with the bid. BeiGene's shares are also traded in Hong Kong.
Beigene is considering using the net proceeds from the offering for operating capital and other general corporate purposes, as divulged in detail in the prospectus supplement the group will file pursuant with the offering.
The Ordinary Shares were offered in line with an automatically effective shelf registration statement that was previously filed with the U.S. Securities and Exchange Commission on May 11, 2020.
The stock placement is BeiGene's fourth round of capital infusion to boost its research and development capability since the Beijing-headquartered company listed on the Nasdaq in 2016, suggesting the second-biggest pharmaceutical market in the globe is indispensable, despite two years of trade friction with the US.
Customers in the share sale include American generics behemoth Amgen Inc. and investment group Baker Bros. Advisors LP which in 2019 had acquired a 21 percent stake in Beigene to the tune of $2.7 billion to jointly research and develop cancer treatments.
The share sale comes after the Beijing-headquartered group's cancer therapy became the first cancer drug produced in China to be granted approval from the U.S. Food and Drug Administration last November, placing BeiGene as among the most lucrative Chinese biotech firms taking on the world's most prominent pharmaceutical companies in health and scientific research.
In the last three years, BeiGene, Ltd. has narrowed down its earnings per share (EPS) by 60 percent annually. In the last four quarters, its total sales have risen 65 percent. Analysts said the drop in earnings could be somewhat an issue for some investors. But in contrast, its revenue growth is robust, suggesting a potential for earnings growth.
Credit Suisse is acting as a corporate finance counselor to the pricing panel of BeiGene's board in conjunction with the share sale. Goodwin Procter LLP is acting as legal adviser to BeiGene in line with the bid.
